Companies in Vietnam roll out layoffs as manufacturing slows-Xinhua

Companies in Vietnam roll out layoffs as manufacturing slows

Source: Xinhua

Editor: huaxia

2023-06-05 16:19:30

HANOI, June 5 (Xinhua) -- Vietnam's economy is hemorrhaging jobs and may not stop bleeding until the end of this year, as companies face slumping global demand and prepare for a possible recession, Vietnam News reported on Monday.

A survey, which was released by the Private Economic Development Research Board, showed 82 percent, out of 9,560 businesses, said they would either trim their workforce or cease operations due to a slowdown in new orders.

The survey also showed 54 percent had planned layoffs and 22 percent would slash more than half of their jobs, dominated by companies in southern business hub Ho Chi Minh City and industrial Binh Duong province.

The economic development board forecast the wave of layoffs would go unabated until the end of 2023 as 30 percent of surveyed businesses said they saw their revenues drop by half on waning demand.

Other data released in mid-May by the Ministry of Labor, Invalids, and Social Affairs painted a similarly bleak picture, warning of another round of layoffs to take place in the following months if the situation continued to worsen.

More than 630,000 workers lost their jobs or had their hours cut in Vietnam last year, according to the labor ministry.

Traditional labor-intensive sectors such as textiles, footwear, and seafood have been hardest hit, already shedding thousands of jobs so far this year.

PouYuen Vietnam, one of the country's largest shoe manufacturers for international brands such as Nike and Adidas, announced last month it would cut about 6,000 workers with long-term contracts due to shrinking demand in major markets of the U.S. and Europe.

Last year, PouYuen put 20,000 of its workers on paid leave in rotation. In February, the company reduced its headcounts by almost 3,000 and stopped renewing contracts with 3,000 temporary workers.

The resilient small-and medium-sized, which represent over 40 percent of Vietnam's economic activity, contracted at a less severe rate, according to Vu Quang Thanh, deputy head of the Hanoi Employment Service Center.

However, the job outlook in this key area of the export-driven economy remained grim, experts said.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index fell to 45.3 in May, well below the 50.0 threshold that separates expansion from contraction in manufacturing activity, marking a third straight month of declines.